45/2025-26 Approval of the Council Tax Precept, Revenue and Capital Budgets for 2026/27

3rd March 2026

Author and Job Role:  Kelvin Menon, OPCC Surrey Treasurer 

Protective Marking: OFFICIAL 

Executive Summary: 

On the 4th February 2026 the Police and Crime Panel considered the recommendation from the Police and Crime Commissioner for Surrey to issue a Band D council tax precept for the Surrey area of £352.57. As the recommendation was passed by a majority of panel members present and the statutory requirements in respect of scrutiny from the panel have now been completed the Commissioner is now able to: 

  • set the revenue budget for 2026/27. 
  • Set the capital budget for 2026/27 
  • Calculate the budget requirement for 2026/27 and 
  • Issue precept notices to billing authorities for 2026/27. 

Background 

A report is attached to this decision notice 

Recommendations 

  1. The Police and Crime Commissioner is requested to:  
  1. approve the capital and investment programme of £52.1m for 2026/27 and authorise the Chief Finance Officer to undertake the appropriate financing;  
  1. approve the revenue budget of £346.8m for 2026/27 and 
  1. note the review by the Chief Finance Officer in respect of the robustness of the budget and the adequacy of reserves.  
  1. Note the Council Tax Base of 532,902.1 for the year 2026/27 as notified by the billing authorities within Surrey (item T in the formula in Section 44 (1) of the Local Government Finance Act 1992, as amended).  
  1. Approve the following amounts for the year 2026/27 in accordance with Sections 43, 44 and 47 of the Local Government Finance Act 1992, as amended: –  
  1. £346,802,638 being the aggregate of the amounts which the Police and Crime Commissioner estimates for the items set out in Section 43 (2) (a) to (d) of the Act;  
  1. £158,917,345 being the aggregate of the amounts which the Police and Crime Commissioner estimates for the items set out in Section 43 (3) (a) to (b) adjusted for the item set out in the Act;  
  1. £187,885,293 being the amount by which the aggregate at (a) above exceeds the aggregate at (b) above, calculated by the Police and Crime Commissioner in accordance with Section 43 (4) of the Act, as its Council Tax Requirement for the year.  
  1. £352.57 being the amount at (c) above divided by the tax base as notified by billing authorities for Surrey, calculated by the Police and Crime Commissioner in accordance with Section 44 (1) of the Act, as the basic amount of tax for the year. 
  1. Valuation bands being the amounts given by multiplying the amount of (d) above by the number which, in the proportion set out in Section 5 (1) of the Act, is applicable to dwellings listed in a particular valuation band divided by the number which in that proportion is applicable to dwellings listed in valuation band D, calculated by the Police and Crime Commissioner in accordance with Section 47 (1) of the Act, as the amounts to be taken into account for the year in respect of the categories of dwelling listed in different valuation bands. 
Band 2025/26 2026/27 Increase 
      
A 225.05 235.05 10.00 
B 262.56 274.22 11.66 
C 300.07 313.40 13.33 
D 337.57 352.57 15.00 
E 412.59 430.92 18.33 
F 487.61 509.27 21.66 
G 562.62 587.62 25.00 
H 675.14 705.14 30.00 
  1. Resolve that under Section 52ZB of the Local Government Finance Act, the Commissioner’s relevant basic amount of Council Tax for 2026/27 is not excessive in accordance with the principles determined under Section 52ZC (1) of the Localism Act 2011. 
  1. Resolve that in accordance with Section 40 of the Local Government Finance Act 1992, as amended, the billing authorities within the area of this authority be issued with precepts in the amount of £187,885,293 for the financial year beginning 1 April 2026, the amount of the retrospective precepts to be issued to each billing authority’s area in accordance with the Sections 43, 44 and 47 of the 1992 Act, as amended. 

Police and Crime Commissioner Approval 

I approve the recommendation(s): 

Signature:  PCC Lisa Townsend (wet signed copy held in Office)

Date: 5th February 2026

All decisions must be added to the decision register. 

The Police and Crime Commissioner for Surrey 

Approval of the Council Tax Precept and Revenue and Capital Budgets 2026/27 

Report by Kelvin Menon, Treasurer to the Police & Crime Commissioner for Surrey 

Purpose of the Report  

  1. The purpose of this report is to request the Police and Crime Commissioner for Surrey (the PCC) to approve the revenue budget, capital programme and precept for the financial year 2026/27 and issue a demand to the billing authorities as a major precepting authority.  

Background  

  1. The Local Government Finance Act 1992, as amended by the Localism Act 2011 sets out the requirements for the Commissioner to consider council tax calculations by major precepting authorities.  
  1. This report sets out the proposed revenue budget and capital programme for 2026/27, together with a review of the current year’s budget position to allow a budget and council tax to be approved in accordance with legislative requirements.  
  1. In preparing the Revenue and Capital Budgets for 2026/27 the PCC has considered the following issues:  
  • The financial settlement from Government to the Police for 2026/27;  
  • The key principles underlying the four-year Medium Term Financial Plan 2026/27 – 2029/30 (MTFP).  
  • The likely revenue and capital outturn for 2025/26;  
  • The efficiencies to be made in 2026/27;  
  • The impact of different precept increases. 
  • The delivery of the Police and Crime Plan;  
  • The level and adequacy of Reserves;  
  • The risks associated with the budget for 2026/27 and beyond; 
  • The view of the Chief Constable on resourcing operational requirements;  
  • The view of the Chief Financial Officer on the robustness of the budget for 2026/27. 

 Where we have come from 

  1. In 2018/19, Government funding for policing began to increase after many years of zero growth at best. The Government also raised the referendum limit to enable PCCs to increase the Band D precept above inflation without a referendum. In 2019 the Conservative Government announced its intention to fund the recruitment of an additional 20,000 officers nationally (Project Uplift) over the three years to March 2023 for which additional funding was provided and then in 2025/26 the new Labour Government provided £200m of additional funding to increase the number of officers in neighbourhood policing. As a result, the group budget rose by around £120m to £329m in the 11 years to 2025/26.  
  1. In the last few years, both Governments have also provided additional funding to offset the cost of the pay review body recommendations on police pay. In theory this grant was given to offset the cost of the pay rise over an agreed budgeted figure.  However, in reality, due to the way the money is distributed, this did not cover the entire cost. No funding was provided for police staff and even the police officer pay costs are ongoing only a one-off contribution was made.  
  1. Although growth through Uplift has now finished, Forces were expected to maintain police officer numbers or suffer a financial penalty. So far, Surrey has managed to hit these milestones through an intensive recruitment campaign to replace those officers that leave or retire. On the 16th January 2026 the Government announced its intention to remove the numerical uplift requirement to maintain a fixed number of officers – which is very welcome. This will mean that Chief Constables will have the flexibility to deploy the most appropriate resource to meet operational requirements without having to use officer just to make up the numbers. However, at the same time the Government did signal its intention to put in place a penalty regime for Forces that do not achieve their neighbourhood policing quotas – and further details as to how this will operate are awaited.  
  1. The Force has made significant savings over the last 10+ years and as a result has managed to achieve a balanced budget. However, as time has gone by the scope for savings has become more and more limited, not helped by the fact that police officer numbers are ringfenced (and represent over 50% of costs) and so the delivery of savings has become more challenging. This has meant that for the first time for a while the savings for the current year, 2025/26, are unlikely to be achieved in full adding to pressures in future years.  

Where are we now 

  1. Two years ago, the Chief Constable, Mr Tim De Meyer, set out his vision for the Force and how it was going to be more responsive to public concerns. 2025/26 was the second year in what is a five-year plan.  
  1. Our Plan can be summed up as follows: 

“Surrey Police fights crime and protects people. We strive to earn the trust and confidence of all our communities. Here for everyone who needs us, we put service before self”. 

This statement is reflected in three objectives: 

  • We prevent crime and solve problems. 
  • We investigate crime thoroughly. 
  • We pursue criminals relentlessly. 

This has meant a renewed focus on tackling anti-social behaviour, cracking down on shoplifting gangs, drug dealers and burglars in our communities and taking the most dangerous and persistent offenders off our streets.  

  1. 2025/26 marked the second year of a 5-year programme to implement “Our Plan” and bring improvements to the Force. When requesting of the PCC the full precept last year the Chief Constable committed to:  
  • Continue to recruit and retain officers and staff in an increasingly challenging market. 
  • Improve our charge rate still further to be in the top half of the table nationally. i.e. Move from 34th place to 22nd or higher. 
  • Maintain and build on our dramatic progress in Year 1 
  • Continue to build on the charge rate for shoplifting to beat the national average. 
  • Embed the use of analytics driven next-level crime management through 2025. 
  • Continue to increase our visibility to residents and respond robustly to public concerns.  
  • Set the foundations for further improvements in Year 3 with the goal of being in the top half for performance when compared with police forces nationally. 
  1. The PCC is pleased to report that not only have these commitments been achieved in 2025/26 but also Surrey Police has:   
  • Maintained front-line policing services & numbers 
  • Significantly improved performance in the Force Contact Centre  
  • More than doubled the criminal charges to court in Year 1 
  • Increased criminal charges further in Year 2  
  • 20% more arrests in year 1, with a further 6.6% increase in year 2. 
  • Reduced suspects by a third in year one and maintained that reduction in year 2, protecting more people from harm in Surrey. 
  • Improved public confidence and victim satisfaction, strengthening the relationship between Surrey Police and Surrey residents 
  • Achieved significant performance improvements for contact with 999 calls being the 7th best nationally and reducing the average waiting times for 101 from over 3 minutes to 48 seconds 
  • A strong track record of crime prevention, reducing crime in Year 2 by 1980 offences 
  • Policed major events effectively and responded well to protests 
  • Surrey’s charge rate has now risen to 25th nationally, with the ambition to continue to improve.  
  1. The Chief Constable, with the support of the PCC, is keen to continue to drive improvements in year three of his five -year plan for 2026/27 and has committed to:  
  • Continue swiftly and drastically to tackle violence against women and girls, by for example: Increasing charges for rape and domestic abuse; extending operations such as Shield and Olympic 
  • Add a further 1,000 charges, thereby improving our charge/summons position to top half nationally 
  • Boost our productivity through the substantial initial delivery of Op Solve 
  • Continue to clamp down on shoplifting, by intensifying crime prevention operations and solving an additional 250 crimes thereby improving our position nationally to the top half of forces.  
  • Enhance the use of analytics driven next-level crime management through 2026 
  • Maintain our dramatically improved call handling and response performance 
  1. On 17th December 2025 the Government announced the referendum limit of £15 for a Band D taxpayer. This was followed on the 18th December with the provisional settlement, consisting of a single figure but with no breakdown.  
  1. The Government announced that funding to PCCs would increase by £746m to £18.3bn with £382m increase in core grants and £364m increase in Council Tax, assuming all PCCs increase to the maximum permitted.  
  1. On the 16th January 2026 the Government announced funding of a further £50m nationally to enable forces to put in place an additional 1,750 neighbourhood Officers in 2026/27. Whilst there ill be penalties in place if the number of neighbourhood officer is not met theses could be Officer redeployed from other areas. In addition the penalty regime for maintain overall officer numbers (Uplift) was removed for 2026/27.   
  1. The final settlement was confirmed on the 28th January 2026 and consolidated everything together but overall was unchanged.  
  1. The Chief Constable has made it clear in his meetings with the PCC that he supported the full increase in the precept of £15 in order to maintain the delivery of his operational improvements, as set out in “Our Plan”. 

Overall Financial Picture and Four-Year Plan 

  1. The Medium-Term Financial Plan (MTFP) sets out the financial context for the revenue budget, capital programme and precept for the next financial year 2025/26 and estimates for a further three financial years.  
  1. It brings together all resources including grant, precept, fees and charges, income for special policing and use of reserves and capital.  
  1. This sets out that the plans are affordable over the four financial years. It also addresses risk. However, as the current Spending Review period ends this year there is a lot of uncertainty around future years. 
  1. Despite this the Financial Forecast has been prepared on the basis of a number of key assumptions. These are set in more detail in the Appendix C but the main ones are: 
  • Increase in Government funding as per the spending review. 
  • Council Tax rises set at £15 for 2026/27, the £14 for the next two years and 1.99% thereafter 
  • Pay inflation at 3.0% for each year in expectation that any increase over this level will be funded by Government.  
  • General inflation at 3.5% for each year 
  • No change in cost base i.e. no increase in headcount to meet changes in demand. 
  1. The Financial Forecast (Appendix C) shows that there will be an ongoing need for future financial savings on top of those already achieved. Whilst the forecast itself predicts that these could be over £13.6 over the 4 years from 2026/27 the actual amount will depend on circumstances at the time. For example, if pay was to rise by 1% above the 2% allowed this would add a further £2.4m to costs, which may then have to covered by additional savings. That said there is little doubt that future savings will be required – it is only the quantum that is uncertain.  

Police Financial Settlement 2026/27 

  1. The Police financial settlement was confirmed on the 28th January 2026.  
  1. Nationally £796m in additional funding was provided to PCC of which 46% was new money and 54% from council tax payers.  
  1. For Surrey the actual settlement is shown in the table below: 
Funding 2025/26 – Final £m 2026/27 – Final £m 
Principal Funding 85.8 89.4 
Revenue Support Grant 37.1 38.6 
Legacy Council Tax Grants 9.2 9.2 
Operation Uplift  5.7 4.4 
Pension Grants 6.1 6.1 
National Insurance 4.0 4.0 
Neighbourhood Policing 2.6 4.7 
Total 150.5 156.4 
Increase  5.9 
  • The most significant change was the removal of funding for additional Uplift Officers over and above the original allocation based on head count and redistributing this on a formula basis resulting in a loss of £1.5m for Surrey. In additional although the requirement to have a minimum number of officers has been removed forces must meet the neighbourhood policing target or face a financial penalty. How this is measured and calculated has not be shared as yet.  

Budget Growth  

  1. At the start of the budget process services are asked to submit their unavoidable growth bids for possible inclusion within the budget. These bids go through a rigorous challenge process to ascertain whether they are indeed unavoidable, and as a result a large number are dismissed.  
  1. The biggest growth relates to the pay with a 3% allowance for 2026/27 as well as the additional 1.4% awarded in 2025/26 over the 2.8% budgeted and despite being funded in 2025/26 was not in 2026/27. The total growth and the resulting budget is set out in the table below: 
Category £m £m 
2025/26 Revenue budget  £330.6 
Adjustments:   
Pay Inflation 9.4  
Price Inflation 2.4  
Police officer and staff increments 2.0  
Staff Pension Scheme (0.6)  
Unavoidable Cost Pressures 1.1  
Capital funding and financing 2.7  
IT and change 1.4  
Victims and commissioning 0.5  
Estates strategy 0.7  
Total Cost Increases 19.6  
Less: Savings (3.4)  
Total growth in budget  16.2 
2026/27 Revenue Budget Proposed  £346.8 
  1. The Chief Constable is of the view that he requires a budget of £346.8m to:  
  • Meet the requirements of the Strategic Policing Requirement. 
  • Meet the priorities in the PCC’s Police and Crime Plan. 
  • To maintain and deliver the improvements set out in year 3 of “Our Plan” 
  • Keep pace with the increasing demands of the Force. 
  • To minimise reductions in staffing and operational capabilities 

Efficiency Savings 

  1. Surrey Police has a good track record of delivering savings and has delivered £90m since 2010.  
  1. There is a legal requirement for the budget to be balanced and the original budget for 2026/27 needed £5.5m of savings to fulfil this. Of this £2.1m relates to savings not achieved in the previous year.  
  1. The achievement of savings is reported on regularly to the PCC as part of her Performance meetings with the Chief Constable. However given the level of savings historically achieved it is becoming more difficult to deliver future savings.  

Council Tax 2026/27  

  1. The Localism Act 2011 introduced a power for the Secretary of State for Communities and Local Government to issue principles that define what should be considered excessive Council Tax and to propose limits. From 2013 onwards, any PCC that wishes to raise the council tax above the limits set by the Secretary of State will have to hold a referendum. 
  1. As part of the autumn statement the referendum limit was set by the Government at £15 giving a Band D Council Tax as set out below:  
Year Band D Council Tax Change £ Change % 
2026/27 £352.57 £15.00 4.4% 
  1. In accordance with legislation the PCC proposal to increase the Council Tax precept by £15 was considered by the Police and Crime Panel on 4th February 2026. The full report can be found on their website. The panel voted in favour of the increase by a 7 to 2 majority.  
  1. Billing Authorities have advised that the Council tax base for 2026/27 has increased to 532,902 Band D equivalent due to housebuilding and overall the collection funds are £2.8m in surplus.   
  1. The increase in the Band D precept of £15 coupled with the tax base increase will raise an additional will raise an additional £10.8m in 2026/27 which is reflected in the budget. 
  1. For illustrative purposes the impact on the Force of having a lower precept was considered. For each £1 that the precept was reduced by the Force would need to find £0.5m of savings. As 80% of the Force’s costs relate to wages and Police Officer numbers are protected due to Uplift this saving could only come by reducing Police Staff numbers. £0.5m is equivalent to 15 staff. This would increase the level of staff vacancies on top of the current vacancy margin. The Chief Constable was of the view that these reductions in key areas would put at risk the delivery of the improvements he wishes to deliver under his vision “Our Plan”.   

Surrey PCC Public Consultation on the Police Precept 2026/27  

  1. As in previous years an online consultation with residents was commenced on 13th January 2026 to enable the PCC to gauge resident’s views on any increase.  
  1. The survey asked whether residents would be happy to pay an increase of £14 or not (£14 was used as the increase to £15 was only announced by Governmetn after the consultation had started). 57% of residents that responded were in agreement with a £14 increase.  

Revenue Budget for 2026/27 

Performance for the year so far, up to Period 8, against the Revenue Budget 2025/26 

  1. Throughout the year, the PCC closely monitors the delivery of expenditure against budget in public Performance meetings. Regular updates have also been provided to the Police and Crime panel. Any revisions to those budgets in line with the Financial Regulations are noted as key decisions, if required, on the PCC’s website.  
  1. The revenue forecast as of 30th November 2026 was as follows: 
 2025/26  Annual Budget £m 2025/26 Outturn  Forecast  £m Variance £m 
PCC Budget 4.0 4.0 (0.0) 
Operational Delivery Budget 328.1 329.1 1.0 
Total 2025/26  332.1 333.1 1.0 
Funding (332.1) (332.0) 0.1 
Grand Total (0.0) 1.1 1.1 

A more detailed report can be found on the Police and Crime Panel agenda for 4th February 2026.  

  1. As at month 8 the Surrey Police Group is predicting an overspend of £1.1m due to costs, such as overtime, being above budget and £2.1m of savings being undeliverable.   

Proposed Revenue Budget for 2026/27 

  1. A summary of the 2026/27 net revenue budget is below: 
  1. The total group budget is under the control of the Police and Crime Commissioner. However, almost 99% of it is delegated by the PCC to the Chief Constable to fund all day-to-day operational policing activities. The PCC retains a small part of the budget for the running costs of the Office of the Police and Crime Commissioner including Governance as well as providing and commissioning services in areas such as custody visitors, community safety, victim support and crime prevention. A breakdown of the OPCC budget is shown below: 
 2025/26 £m 2026/27 £m Change £m 
OPCC Net Operational Costs 1.749 1.865 0.116 
OPCC Net Commissioned Services 2.226 2.726 0.500 
Funded from Reserves (0.250) (0.250) 0.00 
Net OPCC Budget £3.725 £4.341 0.616 
%age of Group Budget 1.1% 1.3% N/A 
Operational costs as %age of net Budget 0.5% 0.5% N/A 
  1. The ‘OPCC Net Operational Costs” includes salary and associated costs of the PCC, Chief Executive, Chief Finance Officer, and any other staff employed to support the duties of the PCC as well as office-running costs, subscriptions, communications etc. It also includes other statutory local policing body costs such as internal and external audit, banking, and treasury management etc. The rise in costs is due to increased audit fees and pay increases in line with the Force. 
  1. The “OPCC Net Commissioned Services” consists of grants for services for victims, community safety, crime prevention etc and the staff to commission them. Due to reductions in funding from Government and increasing demand from Victims, driven in part by delays with the judicial process, the budget for these services was increased by £0.5m. Further details can be found on the OPCC website. 

Capital & Investment Programme 2026/27  

  1. Capital and investment expenditure of £52.1m is budgeted for in 2026/27 to be financed by a combination of borrowing, capital receipts and revenue transfers as there is no direct Government Capital funding. The capital budget for 2026/27 and an estimate for the 4 years beyond that is shown in the table below: 
  1. The Capital is to be used as follows: 
  • Hardware refresh, including servers and cloud storage. 
  • Mechanical and electrical replacement program 
  • Provision of new vehicles. Number of vehicles have reduced but costs have risen. 
  • Estates strategy includes development of the sites in Leatherhead and Redhill and enabling works at Mount Browne New access road at Mount Browne (MTB), Eastern hub and MTB redevelopment 
  1. The lack of Government grants makes the funding of Capital a challenge for all Forces. It is anticipated that the 2026/27 capital program will be funded with a £15m contribution from revenue and reserves, £10.7m from asset sales and £26.4m external borrowing. If external borrowing is needed this can only be done by the PCC and then only for long life assets such as buildings. Any borrowing must also comply with the Prudential framework and be affordable.  

Reserves 2026/27 

Background Information on Reserves 

  1. Revenue and Capital Reserves are an important resource for day to day as well as medium term financial planning despite being one-off in nature. The Chartered Institute of Public Finance and Accountancy consider that PCCs should establish reserves including the level of those reserves based on the advice of their chief finance officers and should make their own judgements considering all the relevant local circumstances. 
  1. The requirement for financial reserves is acknowledged in statute. Sections  

31A, 32, 42A and 43 of the Local Government Finance Act 1992 require billing and precepting authorities in England and Wales to have regard to the level of reserves needed for meeting estimated future expenditure when preparing budgets. The Chief Finance Officer is required as part of the budget setting process to provide a statement on the adequacy of reserves. 

  1. The Home Office Financial Management Code of Practice also sets out the  

following requirements: 

  • PCCs to establish a policy on reserves including how they may be used. 
  • Full details of how the reserves and provisions policy will operate locally.  
  • Ensure that the annual budget includes a realistic amount of operational contingency that is available to the Chief Constable for operational priorities without the need for additional approval; and  
  • Provision for budgets to be carried forward from one financial year to the next. 
  1. The establishment and maintenance of resource backed reserves are held for four main purposes: 
  • As a working balance to help cushion the impact of uneven cash flows and avoid unnecessary temporary borrowing – this forms part of general reserves. 
  • Provide funds to cushion the impact of unexpected events or emergencies -this also forms part of general reserves. 
  • Provide funds for the purposes of managing risk e.g. insurance reserve; and 
  • As a means of building up funds, often referred to as earmarked reserves, to meet known or predicted requirements; earmarked reserves are accounted for separately but remain legally part of the reserves. 
  1. The Chief Finance Officer (CFO) has a fiduciary duty to local taxpayers and must be satisfied that the decisions taken on balances and reserves represent proper stewardship of public funds. Within the existing statutory and regulatory framework, it is the responsibility of the CFO to advise about the level of reserves that they should hold and to ensure that there are clear protocols for their establishment and use. Reserves should not be held without a clear purpose. 
  1. In assessing the appropriate level of reserves, they need to be not only adequate but are also necessary. This will involve an assessment of the financial risks faced by the organisation and the level of mitigation that can be put in place to reduce them.   

Review of Reserves 

  1. The Chartered Institute of Public Finance and Accountancy (CIPFA) guidance on Reserves and Balances (LAAP Bulletin No. 99 July 2014) and the requirements of the Code suggest twice yearly reviews of reserves. By doing this, the visibility of reserves is increased and consideration of their use is placed at the forefront of the decision-making process. 
  1. In accordance with good practice, reserves are reviewed for adequacy at the time that the statements of accounts are prepared (April/May) and again when the budget and MTFS are prepared (November/December). 

Surrey Reserves 

  1. All reserves are under the ownership and control of the PCC and the PCC must retain adequate reserves so that unexpected budget pressures can be met without having a detrimental impact on normal day to day operational activities. The PCC’s policy on reserves is based on an understanding of the organisation’s needs and risks. Part of this process is to give a clear explanation of the existing and proposed use of reserves.  
  1. The PCC plans to maintain the general reserve at the 3% of net budget requirement in line with the Reserves Strategy. Specific reserves are only employed for expected risks or to build up funds for a major project or expense. 
  1. A breakdown of the reserves held by the PCC on behalf of the Surrey Police Group is set out in the following table.  
Estimated figures assuming all savings achieved and no additional spend 31st March 2026 £m 31st March 2027 £m 
General Reserves 11.0 11.0 
Earmarked Reserves   
OPCC Operational – For use by the PCC 1.2 1.2 
CC Operational – For use by the CC 1.1 1.1 
Cost of Change – to improve efficiency and productivity 5.0 1.0 
Estates strategy – to support the new HQ 7.2 7.2 
CC Op Pheasant – historic case reviews 0.5 0.5 
Delegated Budgetary – to cover unbudgeted costs  5.3 5.6 
Insurance – to cover excess on claims 2.8 2.8 
Capital receipts – Asset sales 0.5 0.5 
Total Earmarked Reserves 23.6 19.9 
Total Reserves 34.6 30.9 
%age General Reserves to 2026/27 Budget 3.2 3.2 
%age Total Reserves to 2026/27 Budget 10.0 9.0 

Adequacy of Reserves and Robustness of Budget Estimates  

  1. The Local Government Act 2003 requires the Chief Finance Officer (CFO) to undertake an assessment of the robustness of the annual budget and the adequacy of reserves. That assessment and a statement is to be included in the key decision annual budget and precept report 2026/27. 
  1. The CFO has applied the same principles used to undertake the assessment of the 2026/27 budget to the following three years of the MTFS. In assessing the robustness of the budgets and forecasts, the CFO has considered the following issues:  
  • The general financial standing of the PCC.  
  • The underlying budget assumptions, including an assessment of the major estimates including pay and price increases.  
  • The future budget pressures identified including changes to pension scheme contributions.  
  • A risk assessment of expenditure and income estimates including adequacy of budget monitoring and financial reporting arrangements  
  • The impact of the police grant settlement and of subsequent anticipated  

future settlements including any change to the grant allocation method.  

  • The precept and planned increases.  
  • The adequacy of the budget monitoring and financial reporting arrangements.  
  • The adequacy of the PCC’s governance arrangements and internal control  

system including the risk management system.  

  • The adequacy of general reserves to cover any potential financial risks faced by the PCC.  
  1. On 31 March 2026, the Police and Crime Commissioner’s General Reserve, including the PCC and CC delegated reserves is over 3% and therefore meets the approved reserves policy. 
  1. £5.5m of savings are required for 26/27 of which £2.1m is brought forward from the prior year. Looking forward the level of savings required is still quite substantial and so reserves may be needed to enable plans to be put in place to realise these and to cover any short-term shortfall. The Force does have a good track record of delivering savings but this is becoming more difficult, without impacting front line services, as is evidenced by the shortfall in 2025/26.   
  1. After taking account of known and anticipated issues the Chief Financial Officer considers that the revenue and capital estimates are robust and that the level of reserves is adequate to cover the financial risks faced by the PCC Group for 2026/27. However, there are a number of risks as follows: 
  1. The lack of detail in the settlement has meant that the budget has been set on the basis of assumptions which may, or may not, prove to be accurate. The Force has adequate reserves to cover this in the short term, but it may add to pressures later in the year. In addition, the lack of detail as to the requirements for Neighbourhood Policing could have financial implications that would have to be managed.    
  1. In respect of pay, 3.0% has been budgeted for in line with Government assumptions for public sector pay. However, given the final decision rests with the independent pay review body, a higher figure may be recommended. Although the Government has funded this in the past there is no guarantee this will be repeated. However, the Force does have adequate reserves to cover costs in the short term whilst further savings are delivered. 
  1. Even with the £15 proposed precept increase, the Force will still need to make savings in the current year and the medium term. Although plans are in place or being developed there is still a risk that the savings will not be met. Were this not to happen, more extreme measures, such as a vacancy freeze, would need to be considered to balance the budget. Whilst the quantum of savings is not large compared to the overall budget, the need to deliver them could have an operational impact.   
  1. The Government has said it intends to publish its Policing Bill in the spring. This could have financial implications within the medium term in respect of top sliced functions and Force mergers. These are not expected to impact the robustness of the current budget. 
  1. The Government has indicated that it is going to abolish PCCs in May 2028 and put in place new governance arrangements. It has been assumed that there will be no change in the cost of these arrangements compared to the current model but were this not to be the case this could have an impact in the medium term. There are also risks that commissioned services (such as those that support victims and crime prevention) may not be maintained at existing levels. 
  1. Surrey is going through local government reorganisation in the next couple of years. This could impact the Force due to challenges in maintaining the continuity of partnerships and shared services as well as the loss of shared accommodation.   

Council Tax Requirement  

  1. The Localism Act requires the Commissioner to set a Council Tax Requirement. The calculation of the Council Tax Requirement, based on the proposed revenue budget and contribution from reserves is set out below: 
  1. The notified Council Tax base figure is 532,902 this represents an increase of 12,302 (2.4%) over the previous year.  
  1. The billing authorities are forecasting a cumulative surplus of the collection fund of £2.766m due to new development and better than anticipated collections during the year.  

Consultation with the Police and Crime Panel 

  1. The Police and Crime Panel considered the PCC precept proposals on the 4th February 2026. This meeting took place after two earlier finance subcommittee briefings. The PCCs recommendation for a £15 increase was agreed by a majority of 5 of the members present at the meeting.  

Risk Management 

  1. Associated risks have been considered and recorded as appropriate. These can be found in the precept paper on the Police and Crime Panel agenda for the 4th February 2026.  

Legal 

  1. The PCC has the legal responsibility duty to set the precept, revenue, and capital budget for the year. 

Equality and diversity 

. 

  1. Any implications arising from this budget in respect of Equality and Diversity have been considered by the Chief Constable as part of the budget setting process. 

Kelvin Menon  

Chief Finance Officer, Office of the PCC  

Contact: Kelvin Menon, Chief Finance Officer  

Email: kelvin.menon@surrey.police.uk 

Appendices:  

Appendix A  TAX BASE AND PRECEPT SCHEDULE 2026/27  

Appendix B MEDIUM TERM FINANCIAL STRATEGY AND ASSUMPTIONS 

APPENDIX A 

TAX BASE AND PRECEPT 2026/27 

The Tax Base for the year 2026/27 is the aggregate of the amounts tax bases calculated by the billing authorities to which the Police & Crime Commissioner for Surrey issues precepts totalling. This totals 532,902.1 for band D equivalents as set out in the table below. The basic amount of Council Tax (Police Precept) is the budget requirement less the amounts receivable from other funding sources, all divided by the tax base. For 2026/27 this shall be £352.57 to the nearest penny, for band D properties. The amounts per band are as follows: 

Band 2025/26 2026/27 Increase 
      
A 225.05 235.05 10.00 
B 262.56 274.22 11.66 
C 300.07 313.40 13.33 
D 337.57 352.57 15.00 
E 412.59 430.92 18.33 
F 487.61 509.27 21.66 
G 562.62 587.62 25.00 
H 675.14 705.14 30.00 

The amount of Council Tax payable for dwellings listed in a particular valuation band, calculated in accordance with the proportions set out in Section 5(1) of the Act, shall be as follows (shown to the nearest penny). 

  Tax Base Precept Due 2026/27 Surplus/(deficit) from prior year Total Payments Due to Surrey Police 
Elmbridge 67,951.0  23,957,484.07 150,500.00 24,107,984.07 
Epsom & Ewell 34,083.2  12,016,713.82 (54,615.00) 11,962,098.82 
Guildford 61,363.5  21,634,929.20 189,259.00 21,824,188.20 
Mole Valley 42,944.4  15,140,907.11 120,259.00 15,261,166.11 
Reigate & Banstead 65,182.5  22,981,394.03 95,676.71 23,077,070.74 
Runnymede 36,497.4  12,867,888.32 301,005.00 13,168,893.32 
Spelthorne 41,278.1  14,553,419.72 906,300.00 15,459,719.72 
Surrey Heath 40,473.6  14,269,777.15 225,017.43 14,494,794.58 
Tandridge 39,530.7  13,937,338.90 164,203.00 14,101,541.90 
Waverley 59,993.0  21,151,732.01 222,342.00 21,374,074.01 
Woking 43,604.7  15,373,709.08 446,966.00 15,820,675.08 
          
Total 532,902.1  187,885,293.40 2,766,913.14 190,652,206.54 

This table shows that the Surrey district and borough councils be requested to make payments of sums totalling £187,885,293 due under precepts calculated in proportion to their Council Tax Band D equivalents. In addition, a net surplus on collection funds will also be paid to the total value of £2,766,913. 

PRECEPT PAYMENT DATES 

Thu, 16 Apr 2026 Wed, 20 May 2026 Tue, 30 Jun 2026 Wed, 29 Jul 2026 Tue, 15 Sep 2026 Tue, 13 Oct 2026 Thu, 19 Nov 2026 Wed, 06 Jan 2027 Fri, 19 Feb 2027 Fri, 12 Mar 2027  
 
 
 
 
 
 
 
 
 

APPENDIX B 

MEDIUM TERM FINANCIAL FORECAST